Question 1

Provide two examples of what economists refer to as "institutions."

Accepted Answer

Institutions include a legal system to e

Question 2

Is understanding recessions a microeconomic or a macroeconomic issue? Explain.

Accepted Answer

Macroecono

Question 3

Which statement about incentives is TRUE?

Accepted Answer

A)  Each of us is motivated by the same incentive. 
B)  Each of us is motivated by different incentives. 
C)  Incentives can be manipulated with precision. 
D)  Price is the only relevant economic incentive. 
A)  Each of us is motivated by the same incentive. 
B)  Each of us is motivated by different incentives. 
C)  Incentives can be manipulated with precision. 
D)  Price is the only relevant economic incentive.

Question 4

Which statement about markets is TRUE?

Accepted Answer

A)  They always operate efficiently. 
B)  They bring buyers and sellers together. 
C)  Profits are never an effective discipline on the market. 
D)  Markets need to be always controlled by government. 
A)  They always operate efficiently. 
B)  They bring buyers and sellers together. 
C)  Profits are never an effective discipline on the market. 
D)  Markets need to be always controlled by government.

Question 5

Which of the following statements regarding macroeconomics and microeconomics is TRUE?

Accepted Answer

A)  Microeconomics examines consumer behavior,while macroeconomics studies business behavior. 
B)  Macroeconomics employs many of the same analytical tools as microeconomics. 
C)  Because it focuses on national economies,macroeconomics does not study international trade and finance. 
D)  Neither macroeconomics nor microeconomics is concerned with prices. 
A)  Microeconomics examines consumer behavior,while macroeconomics studies business behavior. 
B)  Macroeconomics employs many of the same analytical tools as microeconomics. 
C)  Because it focuses on national economies,macroeconomics does not study international trade and finance. 
D)  Neither macroeconomics nor microeconomics is concerned with prices.

Question 6

Opportunity costs:

Accepted Answer

A)  are generally the same from individual to individual. 
B)  involve monetary rather than nonmonetary costs. 
C)  decrease as individuals become wealthier. 
D)  influence all economic decisions. 
A)  are generally the same from individual to individual. 
B)  involve monetary rather than nonmonetary costs. 
C)  decrease as individuals become wealthier. 
D)  influence all economic decisions.

Question 7

Complex models are always better than simple ones.

Accepted Answer

A) True 
 B)False

Question 8

Use the following to answer questions 
Figure: Graph Examples
  
-(Figure: Graph Examples)Which graph is an example of a pie chart?

Accepted Answer

A)  graph A 
B)  graph B 
C)  graph C 
D)  graph D 
A)  graph A 
B)  graph B 
C)  graph C 
D)  graph D

Question 9

People make decisions at the margin.Therefore,when deciding whether to purchase a second car,they would compare:

Accepted Answer

A)  the dollar cost of having two cars with the potential income the two cars may generate. 
B)  the additional benefits expected from a second car with the total cost of the two cars. 
C)  the additional benefits expected from a second car with the additional costs of the second car. 
D)  None of the answers is correct. 
A)  the dollar cost of having two cars with the potential income the two cars may generate. 
B)  the additional benefits expected from a second car with the total cost of the two cars. 
C)  the additional benefits expected from a second car with the additional costs of the second car. 
D)  None of the answers is correct.

Question 10

Economists tend to look:

Accepted Answer

A)  at costs but not at benefits. 
B)  at benefits but not at costs. 
C)  for rational responses to incentives. 
D)  only at macroeconomic topics. 
A)  at costs but not at benefits. 
B)  at benefits but not at costs. 
C)  for rational responses to incentives. 
D)  only at macroeconomic topics.

Question 11

Why do economists develop models ("stylized facts")to help with analysis? Discuss the strength and weakness of such an approach.

Accepted Answer

By using stylized facts,economists disti

Question 12

Which is an example of a normative question?

Accepted Answer

A)  How do interest rates influence employment? 
B)  How should a society achieve full employment? 
C)  How do unemployment rates differ among nations? 
D)  What are the long-term effects of unemployment? 
A)  How do interest rates influence employment? 
B)  How should a society achieve full employment? 
C)  How do unemployment rates differ among nations? 
D)  What are the long-term effects of unemployment?

Question 13

An airline finds that its 6 P.M.flights are half-empty but its mid-afternoon flights are full.Which would be the MOST plausible thing for an economist to say?

Accepted Answer

A)  Cut the price of the early morning flight and raise the price of the afternoon flight. 
B)  Nothing can be done to rectify the situation because of consumer sovereignty. 
C)  Fewer flights should be scheduled in the afternoon to force travelers to take the morning flight. 
D)  Nothing can be done because travelers are inflexible with their schedules. 
A)  Cut the price of the early morning flight and raise the price of the afternoon flight. 
B)  Nothing can be done to rectify the situation because of consumer sovereignty. 
C)  Fewer flights should be scheduled in the afternoon to force travelers to take the morning flight. 
D)  Nothing can be done because travelers are inflexible with their schedules.

Question 14

The highest valued alternative that is foregone when you choose an action is called its:

Accepted Answer

A)  opportunity cost. 
B)  utility. 
C)  scarcity. 
D)  benefit. 
A)  opportunity cost. 
B)  utility. 
C)  scarcity. 
D)  benefit.

Question 15

Markets tend to be efficient because:

Accepted Answer

A)  people respond to incentives. 
B)  Adam Smith created markets. 
C)  entrepreneurs always try to produce at the lowest possible cost. 
D)  decisions are always made at the margin. 
A)  people respond to incentives. 
B)  Adam Smith created markets. 
C)  entrepreneurs always try to produce at the lowest possible cost. 
D)  decisions are always made at the margin.

Question 16

Microeconomics looks at particular markets within an economy.

Accepted Answer

A) True 
 B)False

Question 17

Which is TRUE about specialization and exchange between two individuals?

Accepted Answer

A)  They generally benefit the poorer individual at the expense of the richer individual. 
B)  They generally benefit the richer individual at the expense of the poorer individual. 
C)  They generally benefit the poorer individual as well as the richer individual. 
D)  They generally benefit neither the poorer individual nor the richer individual. 
A)  They generally benefit the poorer individual at the expense of the richer individual. 
B)  They generally benefit the richer individual at the expense of the poorer individual. 
C)  They generally benefit the poorer individual as well as the richer individual. 
D)  They generally benefit neither the poorer individual nor the richer individual.

Question 18

Economists believe that:

Accepted Answer

A)  making information available to market participants improves the functioning of the market. 
B)  information should be sold to the highest bidder. 
C)  the flow of information has minimal impact on market efficiency. 
D)  data is more important to traders than information. 
A)  making information available to market participants improves the functioning of the market. 
B)  information should be sold to the highest bidder. 
C)  the flow of information has minimal impact on market efficiency. 
D)  data is more important to traders than information.

Question 19

The concept of scarcity:

Accepted Answer

A)  exists in all societies. 
B)  affects only greedy people. 
C)  is the cause of poverty. 
D)  used to be a problem,but is not an issue for modern industrial nations. 
A)  exists in all societies. 
B)  affects only greedy people. 
C)  is the cause of poverty. 
D)  used to be a problem,but is not an issue for modern industrial nations.

Question 20

What are the benefits of learning the techniques and tools involved within economic analysis?

Accepted Answer

Economic analysis provides a structure f

Provide two examples of what economists refer to as "institutions."

Is understanding recessions a microeconomic or a macroeconomic issue? Explain.

Which statement about incentives is TRUE?

Which statement about markets is TRUE?

Which of the following statements regarding macroeconomics and microeconomics is TRUE?

Opportunity costs:

Complex models are always better than simple ones.

Use the following to answer questions Figure: Graph Examples -(Figure: Graph Examples)Which graph is an example of a pie chart?

People make decisions at the margin.Therefore,when deciding whether to purchase a second car,they would compare:

Economists tend to look:

Why do economists develop models ("stylized facts")to help with analysis? Discuss the strength and weakness of such an approach.

Which is an example of a normative question?

An airline finds that its 6 P.M.flights are half-empty but its mid-afternoon flights are full.Which would be the MOST plausible thing for an economist to say?

The highest valued alternative that is foregone when you choose an action is called its:

Markets tend to be efficient because:

Microeconomics looks at particular markets within an economy.

Which is TRUE about specialization and exchange between two individuals?

Economists believe that:

The concept of scarcity:

What are the benefits of learning the techniques and tools involved within economic analysis?

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Measuring Inflation and Unemployment

Economic Growth

Aggregate Expenditures

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

Macroeconomic Policy: Challenges in a Global Economy

International Trade

Open Economy Macroeconomic

Filters

Exam 1: Exploring Economics

Provide two examples of what economists refer to as "institutions."

Is understanding recessions a microeconomic or a macroeconomic issue? Explain.

Which statement about incentives is TRUE?

Which statement about markets is TRUE?

Which of the following statements regarding macroeconomics and microeconomics is TRUE?

Opportunity costs:

Complex models are always better than simple ones.

Use the following to answer questions Figure: Graph Examples -(Figure: Graph Examples)Which graph is an example of a pie chart?

People make decisions at the margin.Therefore,when deciding whether to purchase a second car,they would compare:

Economists tend to look:

Why do economists develop models ("stylized facts")to help with analysis? Discuss the strength and weakness of such an approach.

Which is an example of a normative question?

An airline finds that its 6 P.M.flights are half-empty but its mid-afternoon flights are full.Which would be the MOST plausible thing for an economist to say?

The highest valued alternative that is foregone when you choose an action is called its:

Markets tend to be efficient because:

Microeconomics looks at particular markets within an economy.

Which is TRUE about specialization and exchange between two individuals?

Economists believe that:

The concept of scarcity:

What are the benefits of learning the techniques and tools involved within economic analysis?

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Measuring Inflation and Unemployment

Economic Growth

Aggregate Expenditures

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

Macroeconomic Policy: Challenges in a Global Economy

International Trade

Open Economy Macroeconomic

Filters