Question 1

As a scientist,an economist's main professional objective is to become wealthy.

Accepted Answer

A) True 
 B)False  False

Question 2

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

Accepted Answer

A) True 
 B)False  False

Question 3

In economics,money is an example of capital.

Accepted Answer

A) True 
 B)False  False

Question 4

A rational decision maker will take only those actions for which the expected marginal benefit

Accepted Answer

A) is positive 
B) is at its maximum level 
C) is greater than or equal to the expected marginal cost 
D) is less than the expected marginal cost 
E) exactly equals the expected marginal cost 
A) is positive 
B) is at its maximum level 
C) is greater than or equal to the expected marginal cost 
D) is less than the expected marginal cost 
E) exactly equals the expected marginal cost

Question 5

The behavior of the entertainment industry in Detroit is a microeconomic topic.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Theory in economics

Accepted Answer

A) involves some simplification of reality 
B) bears no relation to reality 
C) approaches reality in all its complexity 
D) involves so much distortion of reality that it is worthless 
E) focuses on the unique aspects of each situation 
A) involves some simplification of reality 
B) bears no relation to reality 
C) approaches reality in all its complexity 
D) involves so much distortion of reality that it is worthless 
E) focuses on the unique aspects of each situation

Question 8

A rational individual would make charitable contributions only if such contributions receive favorable tax treatment.

Accepted Answer

A) True 
 B)False

Question 9

When constructing an economic model,economists

Accepted Answer

A) rely mostly on their own value judgments and ignore the far more complex world of facts 
B) always try to duplicate reality by including all available information 
C) use assumptions that are true for the individual but never true for the whole economy 
D) must rely on simplifying assumptions that abstract from the complexity of the real world 
E) are primarily concerned with making realistic assumptions 
A) rely mostly on their own value judgments and ignore the far more complex world of facts 
B) always try to duplicate reality by including all available information 
C) use assumptions that are true for the individual but never true for the whole economy 
D) must rely on simplifying assumptions that abstract from the complexity of the real world 
E) are primarily concerned with making realistic assumptions

Question 10

Economics is best defined as the study of how individuals decide to use limited resources in an attempt to satisfy unlimited wants.

Accepted Answer

A) True 
 B)False

Question 11

You currently subscribe to two magazines and are trying to decide whether you should subscribe to a third.What should determine your decision,if you are rational?

Accepted Answer

A) the total cost of the magazines compared to the total satisfaction you would receive 
B) the total amount of satisfaction you would get from the magazines 
C) the enjoyment you would get from the third magazine 
D) the cost of the third magazine,including the time it takes to read it 
E) the cost of the third magazine compared to the additional enjoyment you would get from it 
A) the total cost of the magazines compared to the total satisfaction you would receive 
B) the total amount of satisfaction you would get from the magazines 
C) the enjoyment you would get from the third magazine 
D) the cost of the third magazine,including the time it takes to read it 
E) the cost of the third magazine compared to the additional enjoyment you would get from it

Question 12

Ceteris paribus means "other things constant."

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) The problem only exists 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 only exists 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 14

Rational choice by an individual implies

Accepted Answer

A) the use of some 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 an individual will never regret any action taken 
E) that scarcity can be eliminated for that individual 
A) the use of some 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 an individual will never regret any action taken 
E) that scarcity can be eliminated for that individual

Question 15

A resource is something that

Accepted Answer

A) is used to produce goods and services 
B) is provided by nature,not made by society 
C) exists in unlimited quantities 
D) must be produced by a firm 
E) consumes goods and services 
A) is used to produce goods and services 
B) is provided by nature,not made by society 
C) exists in unlimited quantities 
D) must be produced by a firm 
E) consumes goods and services

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Normative economic statements refer to what should be.

Accepted Answer

A) True 
 B)False

Question 18

The resource identified as land would include

Accepted Answer

A) the effort of farmers 
B) the mules that Amish farmers use to work the fields 
C) the barn that a farmer houses her dairy cattle in 
D) the worlds forests 
E) the cattle that a dairy farmer owns 
A) the effort of farmers 
B) the mules that Amish farmers use to work the fields 
C) the barn that a farmer houses her dairy cattle in 
D) the worlds forests 
E) the cattle that a dairy farmer owns

Question 19

Economists often focus on average behavior because it is easier to predict.

Accepted Answer

A) True 
 B)False

Question 20

When economists refer to capital,they might mean

Accepted Answer

A) money 
B) human skills used in production 
C) stocks 
D) bonds 
E) bank loans 
A) money 
B) human skills used in production 
C) stocks 
D) bonds 
E) bank loans

Exam 1: The Art and Science of Economic Analysis

As a scientist,an economist's main professional objective is to become wealthy.

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

In economics,money is an example of capital.

A rational decision maker will take only those actions for which the expected marginal benefit

The behavior of the entertainment industry in Detroit is a microeconomic topic.

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

Theory in economics

A rational individual would make charitable contributions only if such contributions receive favorable tax treatment.

When constructing an economic model,economists

Economics is best defined as the study of how individuals decide to use limited resources in an attempt to satisfy unlimited wants.

You currently subscribe to two magazines and are trying to decide whether you should subscribe to a third.What should determine your decision,if you are rational?

Ceteris paribus means "other things constant."

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

Rational choice by an individual implies

A resource is something that

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

Normative economic statements refer to what should be.

The resource identified as land would include

Economists often focus on average behavior because it is easier to predict.

When economists refer to capital,they might mean

Economic Tools and Economics Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Aggregate Demand

Baggregate 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

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

Filters