Question 1

Which of the following is a positive question?

Accepted Answer

A) Will the level of teenage unemployment increase if the minimum wage is increased? 
B) Should the minimum wage be set at one-half the average manufacturing wage to guarantee individuals a decent standard of living? 
C) Wouldn't it be more equitable if the minimum wage increased automatically with the cost of living? 
D) Wouldn't it be better to try to increase people's wages through job-training programs rather than by requiring employers to pay minimum wages? 
A) Will the level of teenage unemployment increase if the minimum wage is increased? 
B) Should the minimum wage be set at one-half the average manufacturing wage to guarantee individuals a decent standard of living? 
C) Wouldn't it be more equitable if the minimum wage increased automatically with the cost of living? 
D) Wouldn't it be better to try to increase people's wages through job-training programs rather than by requiring employers to pay minimum wages?

Question 2

Health insurance should be provided to every citizen in a wealthy nation such as the United States.This statement is best described as

Accepted Answer

A) a positive statement. 
B) a normative statement. 
C) a marginal statement. 
D) an implication of an efficient market. 
A) a positive statement. 
B) a normative statement. 
C) a marginal statement. 
D) an implication of an efficient market.

Question 3

The concept of opportunity cost

Accepted Answer

A) is relevant only to economics. 
B) can be applied to the analysis of any decision-making process. 
C) applies to consumers but not to firms. 
D) refers only to actual payments and incomes. 
A) is relevant only to economics. 
B) can be applied to the analysis of any decision-making process. 
C) applies to consumers but not to firms. 
D) refers only to actual payments and incomes.

Question 4

The slope of a horizontal line is

Accepted Answer

A) negative. 
B) zero. 
C) continually changing. 
D) infinite. 
A) negative. 
B) zero. 
C) continually changing. 
D) infinite.

Question 5

If you observe that Event A happens before Event B happens,and you conclude that Event A caused Event B,you would be guilty of an error called the

Accepted Answer

A) fallacy of composition. 
B) fallacy of inductive reasoning. 
C) fallacy of ceteris paribus. 
D) post hoc,ergo propter hoc fallacy. 
A) fallacy of composition. 
B) fallacy of inductive reasoning. 
C) fallacy of ceteris paribus. 
D) post hoc,ergo propter hoc fallacy.

Question 6

Refer to the information provided in Figure 1.3 below to answer the questions that follow.
   Figure 1.3
-Refer to Figure 1.3.If a 45 degree line were also graphed,the existing line shown on the graph would ________ it.

Accepted Answer

A) lie above 
B) lie below 
C) cross 
D) indeterminate from this information 
A) lie above 
B) lie below 
C) cross 
D) indeterminate from this information

Question 7

Which of the following is the best definition of economics?

Accepted Answer

A) the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided 
B) the study of how consumers spend their income 
C) the study of how business firms decide what inputs to hire and what outputs to produce 
D) the study of how the federal government allocates tax dollars 
A) the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided 
B) the study of how consumers spend their income 
C) the study of how business firms decide what inputs to hire and what outputs to produce 
D) the study of how the federal government allocates tax dollars

Question 8

You have observed that every time you do 30 minutes of cardio exercise before taking an exam you get an A.You therefore conclude that to get an A on an exam,all you have to do is 30 minutes of cardio exercise before you take an exam.You have committed the

Accepted Answer

A) fallacy of composition. 
B) fallacy of inductive reasoning. 
C) post hoc,ergo propter hoc fallacy. 
D) fallacy of division. 
A) fallacy of composition. 
B) fallacy of inductive reasoning. 
C) post hoc,ergo propter hoc fallacy. 
D) fallacy of division.

Question 9

Refer to the information provided in Figure 1.5 below to answer the questions that follow.
   Figure 1.5
-Refer to Figure 1.5.As income increases,consumption increases,but for each additional increase in income,consumption increases by a larger and larger amount.If consumption is graphed on the vertical axis and income is graphed on the horizontal axis,the relationship between consumption and income would look like which of the following panels?

Accepted Answer

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

Question 10

The collection and use of data to test economic theories is

Accepted Answer

A) empirical economics. 
B) descriptive economics. 
C) normative economics. 
D) positive economics. 
A) empirical economics. 
B) descriptive economics. 
C) normative economics. 
D) positive economics.

Question 11

If the slope of a straight line is 4 and if Y (the variable on the vertical axis)decreases by 20,then X (the variable on the horizontal axis)

Accepted Answer

A) increases by 5. 
B) decreases by 5. 
C) increases by 80. 
D) decreases by 80. 
A) increases by 5. 
B) decreases by 5. 
C) increases by 80. 
D) decreases by 80.

Question 12

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

Accepted Answer

A) There should be no unemployment in an advanced industrial society. 
B) Higher prices cause consumers to purchase less. 
C) Consumption should be distributed fairly in society. 
D) People should pollute as little as possible. 
A) There should be no unemployment in an advanced industrial society. 
B) Higher prices cause consumers to purchase less. 
C) Consumption should be distributed fairly in society. 
D) People should pollute as little as possible.

Question 13

Refer to Scenario 1.1 below to answer the questions that follow.
SCENARIO 1.1: An economist wants to understand the relationship between minimum wages and the level of teenage unemployment.The economist collects data on the values of the minimum wage and the levels of teenage unemployment over time.The economist concludes that a 1% increase in minimum wage causes a 0.2% increase in teenage unemployment.From this information he concludes that the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers.
-Refer to Scenario 1.1.The collection and use of the data on minimum wage and teenage unemployment over time is an example of

Accepted Answer

A) law and economics. 
B) economic history. 
C) econometrics. 
D) empirical economics. 
A) law and economics. 
B) economic history. 
C) econometrics. 
D) empirical economics.

Question 14

Rent control laws are imposed when city officials believe landlords have been exploiting tenants.Which of the following criteria are they using to guide their actions?

Accepted Answer

A) efficiency 
B) equity 
C) growth 
D) stability 
A) efficiency 
B) equity 
C) growth 
D) stability

Question 15

The principle that irrelevant detail should not be included in a model is known as

Accepted Answer

A) a fallacy. 
B) ceteris paribus. 
C) Ockham's razor. 
D) normative economics. 
A) a fallacy. 
B) ceteris paribus. 
C) Ockham's razor. 
D) normative economics.

Question 16

A market is considered efficient if profit opportunities remain continually available.

Accepted Answer

A) True 
 B)False

Question 17

The branch of economics that examines the functioning of individual industries and the behavior of individual decision-making units is

Accepted Answer

A) positive economics. 
B) normative economics. 
C) macroeconomics. 
D) microeconomics. 
A) positive economics. 
B) normative economics. 
C) macroeconomics. 
D) microeconomics.

Question 18

Normative economics looks at outcomes of economic behavior and evaluates them as good or bad.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is NOT listed in the book as a reason to study economics?

Accepted Answer

A) to learn a way of thinking 
B) to understand society 
C) to be an informed citizen 
D) to learn how to make lots of money 
A) to learn a way of thinking 
B) to understand society 
C) to be an informed citizen 
D) to learn how to make lots of money

Question 20

Refer to the information provided in Figure 1.3 below to answer the questions that follow.
   Figure 1.3
-Refer to Figure 1.3.The slope of the line between Points B and D is

Accepted Answer

A) -3. 
B) -0.33. 
C) 0.33. 
D) 3. 
A) -3. 
B) -0.33. 
C) 0.33. 
D) 3.

Which of the following is a positive question?

Health insurance should be provided to every citizen in a wealthy nation such as the United States.This statement is best described as

The concept of opportunity cost

The slope of a horizontal line is

If you observe that Event A happens before Event B happens,and you conclude that Event A caused Event B,you would be guilty of an error called the

Refer to the information provided in Figure 1.3 below to answer the questions that follow. Figure 1.3 -Refer to Figure 1.3.If a 45 degree line were also graphed,the existing line shown on the graph would ________ it.

Which of the following is the best definition of economics?

You have observed that every time you do 30 minutes of cardio exercise before taking an exam you get an A.You therefore conclude that to get an A on an exam,all you have to do is 30 minutes of cardio exercise before you take an exam.You have committed the

The collection and use of data to test economic theories is

If the slope of a straight line is 4 and if Y (the variable on the vertical axis)decreases by 20,then X (the variable on the horizontal axis)

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

Rent control laws are imposed when city officials believe landlords have been exploiting tenants.Which of the following criteria are they using to guide their actions?

The principle that irrelevant detail should not be included in a model is known as

A market is considered efficient if profit opportunities remain continually available.

The branch of economics that examines the functioning of individual industries and the behavior of individual decision-making units is

Normative economics looks at outcomes of economic behavior and evaluates them as good or bad.

Which of the following is NOT listed in the book as a reason to study economics?

Refer to the information provided in Figure 1.3 below to answer the questions that follow. Figure 1.3 -Refer to Figure 1.3.The slope of the line between Points B and D is

The Economic Problem: Scarcity and Choice

Demand,supply,and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment,inflation,and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

The Money Supply and the Federal Reserve System

Money Demand and the Equilibrium Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Costs Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing and Transitional Economies

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Exam 1: The Scope and Method of Economics

Which of the following is a positive question?

Health insurance should be provided to every citizen in a wealthy nation such as the United States.This statement is best described as

The concept of opportunity cost

The slope of a horizontal line is

If you observe that Event A happens before Event B happens,and you conclude that Event A caused Event B,you would be guilty of an error called the

Refer to the information provided in Figure 1.3 below to answer the questions that follow. Figure 1.3 -Refer to Figure 1.3.If a 45 degree line were also graphed,the existing line shown on the graph would ________ it.

Which of the following is the best definition of economics?

You have observed that every time you do 30 minutes of cardio exercise before taking an exam you get an A.You therefore conclude that to get an A on an exam,all you have to do is 30 minutes of cardio exercise before you take an exam.You have committed the

The collection and use of data to test economic theories is

If the slope of a straight line is 4 and if Y (the variable on the vertical axis)decreases by 20,then X (the variable on the horizontal axis)

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

Rent control laws are imposed when city officials believe landlords have been exploiting tenants.Which of the following criteria are they using to guide their actions?

The principle that irrelevant detail should not be included in a model is known as

A market is considered efficient if profit opportunities remain continually available.

The branch of economics that examines the functioning of individual industries and the behavior of individual decision-making units is

Normative economics looks at outcomes of economic behavior and evaluates them as good or bad.

Which of the following is NOT listed in the book as a reason to study economics?

Refer to the information provided in Figure 1.3 below to answer the questions that follow. Figure 1.3 -Refer to Figure 1.3.The slope of the line between Points B and D is

The Economic Problem: Scarcity and Choice

Demand,supply,and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment,inflation,and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

The Money Supply and the Federal Reserve System

Money Demand and the Equilibrium Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Costs Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing and Transitional Economies

Filters