Question 1

A marginal adjustment only refers to a minor change.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

The difference between positive economic statements and normative economic statements is that

Accepted Answer

A) both c and e are true 
B) positive statements are based on opinion while normative statements are based on fact 
C) positive statements are true and normative statements are often false 
D) positive statements are often false and normative statements are true 
E) positive statements are based on fact while normative statements are based on opinion 
A) both c and e are true 
B) positive statements are based on opinion while normative statements are based on fact 
C) positive statements are true and normative statements are often false 
D) positive statements are often false and normative statements are true 
E) positive statements are based on fact while normative statements are based on opinion

Question 4

Which of the following is a service?

Accepted Answer

A) a college education 
B) an automobile 
C) computer software 
D) a compact disc 
E) a textbook 
A) a college education 
B) an automobile 
C) computer software 
D) a compact disc 
E) a textbook

Question 5

Which of the following is a normative 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 6

Which of the following would be considered a secondary effect of rent control.

Accepted Answer

A) a reduction if the number of rental units that are available to rent 
B) an increase in the number of rental units that people would like to rent 
C) a shortage of rental units in the market 
D) the deterioration in the quality of rental units 
E) an increase in the difficulty of finding a rental unit at the rent control price 
A) a reduction if the number of rental units that are available to rent 
B) an increase in the number of rental units that people would like to rent 
C) a shortage of rental units in the market 
D) the deterioration in the quality of rental units 
E) an increase in the difficulty of finding a rental unit at the rent control price

Question 7

Japan has more vending machines per capita than any other country in the world.One explanation for this phenomenon is that

Accepted Answer

A) vending machines are very expensive in Japan 
B) the customs of the Japanese marketplace encourage businesses to install vending machines 
C) vending machines were invented in Japan 
D) time is less valuable in Japan than it is elsewhere 
E) most products commonly purchased by Japanese consumers are small enough to be sold in vending machines 
A) vending machines are very expensive in Japan 
B) the customs of the Japanese marketplace encourage businesses to install vending machines 
C) vending machines were invented in Japan 
D) time is less valuable in Japan than it is elsewhere 
E) most products commonly purchased by Japanese consumers are small enough to be sold in vending machines

Question 8

Which of the following is an example of a positive statement?

Accepted Answer

A) Workers with families should be paid at least the minimum wage. 
B) If crime rates were reduced,the world would be a better place in which to live. 
C) Marginal tax rates should be reduced for individuals in the highest tax brackets. 
D) An increase in the price of gasoline will cause a reduction in the amount purchased. 
E) Corrupt politicians ought to be voted out of office. 
A) Workers with families should be paid at least the minimum wage. 
B) If crime rates were reduced,the world would be a better place in which to live. 
C) Marginal tax rates should be reduced for individuals in the highest tax brackets. 
D) An increase in the price of gasoline will cause a reduction in the amount purchased. 
E) Corrupt politicians ought to be voted out of office.

Question 9

Macroeconomics is the study of

Accepted Answer

A) the behavior of large firms in the marketplace 
B) the economic behavior of individual decision makers 
C) the behavior of the economy as a whole 
D) how to use the fewest natural resources to produce goods and services 
E) government's role as a stabilizing influence on the economy 
A) the behavior of large firms in the marketplace 
B) the economic behavior of individual decision makers 
C) the behavior of the economy as a whole 
D) how to use the fewest natural resources to produce goods and services 
E) government's role as a stabilizing influence on the economy

Question 10

A fallacy of composition is to assume that

Accepted Answer

A) you can determine the composition of a complex product just by examining its exterior properties 
B) consumer durable goods today do not last as long as they did a generation ago 
C) any mistakes made in producing a product using an assembly line technique will lead to a compounding of errors as the product moves down the line 
D) what is true for any individual component in a group is true for the group as a whole 
E) when I was young I liked cotton candy,but now that I'm older I no longer like it 
A) you can determine the composition of a complex product just by examining its exterior properties 
B) consumer durable goods today do not last as long as they did a generation ago 
C) any mistakes made in producing a product using an assembly line technique will lead to a compounding of errors as the product moves down the line 
D) what is true for any individual component in a group is true for the group as a whole 
E) when I was young I liked cotton candy,but now that I'm older I no longer like it

Question 11

A rational decision maker compares the expected marginal cost to the expected marginal benefit of any activity.

Accepted Answer

A) True 
 B)False

Question 12

Scarcity

Accepted Answer

A) exists because people have wants that are unlimited relative to the availability of resources to satisfy those wants 
B) applies when a resource is not freely available 
C) means that each society and each individual must make choices 
D) exists in all societies 
E) all of the above are true 
A) exists because people have wants that are unlimited relative to the availability of resources to satisfy those wants 
B) applies when a resource is not freely available 
C) means that each society and each individual must make choices 
D) exists in all societies 
E) all of the above are true

Question 13

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 14

To tell a compelling story,an economist relies on

Accepted Answer

A) case studies 
B) anecdotes 
C) irrelevant data 
D) anecdotes and irrelevant data 
E) case studies and anecdotes 
A) case studies 
B) anecdotes 
C) irrelevant data 
D) anecdotes and irrelevant data 
E) case studies and anecdotes

Question 15

According to a 2011 PayScale.com survey,the college major whose median earnings showed the biggest increase from workers with 0-5 years of experience to workers with 10-20 years of experience was:

Accepted Answer

A) Economics 
B) Criminal Justice 
C) Mathematics 
D) Mechanical Engineering 
E) History 
A) Economics 
B) Criminal Justice 
C) Mathematics 
D) Mechanical Engineering 
E) History

Question 16

"Congress must recognize that the growing national debt is the most serious problem that the country faces," is an example of

Accepted Answer

A) a positive statement 
B) a normative statement 
C) a misleading statement 
D) a negative statement 
E) a marginal statement 
A) a positive statement 
B) a normative statement 
C) a misleading statement 
D) a negative statement 
E) a marginal statement

Question 17

"Natural resources" refers

Accepted Answer

A) bodies of water 
B) trees 
C) oil reserves 
D) minerals 
E) All of the answers are correct. 
A) bodies of water 
B) trees 
C) oil reserves 
D) minerals 
E) All of the answers are correct.

Question 18

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 19

The economic behavior of individual decision makers and the determination of price and output in specific markets are both studied in

Accepted Answer

A) microeconomics 
B) macroeconomics 
C) positive economics 
D) normative economics 
E) disequilibrium economics 
A) microeconomics 
B) macroeconomics 
C) positive economics 
D) normative economics 
E) disequilibrium economics

Question 20

Some individuals or families can become completely saturated with a service such as television.This suggests that

Accepted Answer

A) wants are limited 
B) desires for a single commodity can be satisfied but then the focus will switch to other goods and services 
C) a highly productive economy may someday be able to satisfy all human desires 
D) resources are not truly fixed in supply as we generally assume 
E) scarcity does not exist 
A) wants are limited 
B) desires for a single commodity can be satisfied but then the focus will switch to other goods and services 
C) a highly productive economy may someday be able to satisfy all human desires 
D) resources are not truly fixed in supply as we generally assume 
E) scarcity does not exist

Exam 1: The Art and Science of Economic Analysis

A marginal adjustment only refers to a minor change.

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

The difference between positive economic statements and normative economic statements is that

Which of the following is a service?

Which of the following is a normative statement?

Which of the following would be considered a secondary effect of rent control.

Japan has more vending machines per capita than any other country in the world.One explanation for this phenomenon is that

Which of the following is an example of a positive statement?

Macroeconomics is the study of

A fallacy of composition is to assume that

A rational decision maker compares the expected marginal cost to the expected marginal benefit of any activity.

Scarcity

Behavioral assumptions

To tell a compelling story,an economist relies on

According to a 2011 PayScale.com survey,the college major whose median earnings showed the biggest increase from workers with 0-5 years of experience to workers with 10-20 years of experience was:

"Congress must recognize that the growing national debt is the most serious problem that the country faces," is an example of

"Natural resources" refers

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

The economic behavior of individual decision makers and the determination of price and output in specific markets are both studied in

Some individuals or families can become completely saturated with a service such as television.This suggests that

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