Question 1

An efficient economy is an economy

Accepted Answer

A)  in which output is steady or growing and there is low inflation. 
B)  that produces what consumers demand and does so at the least possible cost. 
C)  that distributes output equally among all consumers. 
D)  in which there is a fair distribution of wealth. 
A)  in which output is steady or growing and there is low inflation. 
B)  that produces what consumers demand and does so at the least possible cost. 
C)  that distributes output equally among all consumers. 
D)  in which there is a fair distribution of wealth.

Question 2

Refer to the information provided in Figure 1.2 below to answer the questions that follow.   Figure 1.2
-Refer to Figure 1.2. The slope of the line between Points A and B is

Accepted Answer

A)  0.4. 
B)  1.2. 
C)  2.5. 
D)  indeterminate from this information. 
A)  0.4. 
B)  1.2. 
C)  2.5. 
D)  indeterminate from this information.

Question 3

It always rains about an hour after you finish washing your car. Concluding that washing your car caused it to rain is an example of the

Accepted Answer

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

Question 4

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 is

Accepted Answer

A)  positive. 
B)  negative. 
C)  increasing at an increasing rate. 
D)  decreasing at an increasing rate. 
A)  positive. 
B)  negative. 
C)  increasing at an increasing rate. 
D)  decreasing at an increasing rate.

Question 5

The unemployment rate was falling during all of the years that I was a student, but as soon as I graduated, the unemployment rate started to rise. Therefore, the job market was waiting until I started looking for employment to start to go bad. This statement is an example of

Accepted Answer

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

Question 6

Positive economics seeks to understand behavior, but not make judgments.

Accepted Answer

A) True 
 B)False

Question 7

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 statement, "the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers," is an example of

Accepted Answer

A)  marginal economics. 
B)  normative economics. 
C)  positive economics. 
D)  Ockham's razor. 
A)  marginal economics. 
B)  normative economics. 
C)  positive economics. 
D)  Ockham's razor.

Question 8

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 firms produce additional units, average costs declines by a smaller and smaller amount. If output is graphed on the horizontal axis and average costs are graphed on the vertical axis, the relationship between average costs and output would be 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 9

Economics is best defined as the study of

Accepted Answer

A)  financial decision making. 
B)  how consumers make purchasing decisions. 
C)  choices made by people faced with scarcity. 
D)  inflation, unemployment, and economic growth. 
A)  financial decision making. 
B)  how consumers make purchasing decisions. 
C)  choices made by people faced with scarcity. 
D)  inflation, unemployment, and economic growth.

Question 10

That which we forgo, or give up, when we make a choice or a decision is known as

Accepted Answer

A)  equity. 
B)  causation. 
C)  correlation. 
D)  opportunity cost. 
A)  equity. 
B)  causation. 
C)  correlation. 
D)  opportunity cost.

Question 11

Which of the following is an opportunity cost of attending college?

Accepted Answer

A)  the cost of your apartment or dorm 
B)  the income you could have earned if you didn't attend college 
C)  the cost of the food that you consume while you are attending college 
D)  the education you gain from attending college 
A)  the cost of your apartment or dorm 
B)  the income you could have earned if you didn't attend college 
C)  the cost of the food that you consume while you are attending college 
D)  the education you gain from attending college

Question 12

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 13

The aggregate price level is a topic of macroeconomics.

Accepted Answer

A) True 
 B)False

Question 14

Suppose that you sign up for a one-day cooking class at the local culinary school for $75. Once you arrive at the class, you discover that you must purchase an apron for an additional $5. In this situation, the additional $5 you pay for the apron is an example of

Accepted Answer

A)  an inefficient cost. 
B)  marginal cost. 
C)  opportunity cost. 
D)  an economic loss. 
A)  an inefficient cost. 
B)  marginal cost. 
C)  opportunity cost. 
D)  an economic loss.

Question 15

A(n) ________ is a formal statement of a theory.

Accepted Answer

A)  model 
B)  empirical measure 
C)  positive statement 
D)  causal statement 
A)  model 
B)  empirical measure 
C)  positive statement 
D)  causal statement

Question 16

By invoking the assumption of ceteris paribus, economists

Accepted Answer

A)  consider the impact of all relevant factors. 
B)  hold all variables constant when analyzing a model. 
C)  isolate the impact of one single variable while holding all other variables constant. 
D)  exclude irrelevant detail when analyzing a model. 
A)  consider the impact of all relevant factors. 
B)  hold all variables constant when analyzing a model. 
C)  isolate the impact of one single variable while holding all other variables constant. 
D)  exclude irrelevant detail when analyzing a model.

Question 17

Whenever a former governor is elected president, the unemployment rate decreases; whenever a former congressman is elected president, the inflation rate increases. This statement is an example of

Accepted Answer

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

Question 18

Which of the following statements is not correct?

Accepted Answer

A)  Economics is a behavioral science. 
B)  In large measure, economics is the study of how people make choices. 
C)  If poverty were eliminated, there would be no reason to study economics. 
D)  Economic analysis can be used to explain how both individuals and societies make decisions. 
A)  Economics is a behavioral science. 
B)  In large measure, economics is the study of how people make choices. 
C)  If poverty were eliminated, there would be no reason to study economics. 
D)  Economic analysis can be used to explain how both individuals and societies make decisions.

Question 19

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 20

Related to the Economics in Practice on p. 5: According to the Economics in Practice, ________ of the $10 retail value of a Barbie doll is captured in the United States.

Accepted Answer

A)  none 
B)  35 cents 
C)  $2 
D)  $8 
A)  none 
B)  35 cents 
C)  $2 
D)  $8

An efficient economy is an economy

Refer to the information provided in Figure 1.2 below to answer the questions that follow. Figure 1.2 -Refer to Figure 1.2. The slope of the line between Points A and B is

It always rains about an hour after you finish washing your car. Concluding that washing your car caused it to rain is an example of 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. The slope of the line is

The unemployment rate was falling during all of the years that I was a student, but as soon as I graduated, the unemployment rate started to rise. Therefore, the job market was waiting until I started looking for employment to start to go bad. This statement is an example of

Positive economics seeks to understand behavior, but not make judgments.

Economics is best defined as the study of

That which we forgo, or give up, when we make a choice or a decision is known as

Which of the following is an opportunity cost of attending college?

The aggregate price level is a topic of macroeconomics.

Suppose that you sign up for a one-day cooking class at the local culinary school for $75. Once you arrive at the class, you discover that you must purchase an apron for an additional $5. In this situation, the additional $5 you pay for the apron is an example of

A(n) ________ is a formal statement of a theory.

By invoking the assumption of ceteris paribus, economists

Whenever a former governor is elected president, the unemployment rate decreases; whenever a former congressman is elected president, the inflation rate increases. This statement is an example of

Which of the following statements is not correct?

The collection and use of data to test economic theories is

Related to the Economics in Practice on p. 5: According to the Economics in Practice, ________ of the $10 retail value of a Barbie doll is captured in the United States.

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

Money, the Federal Reserve, and the Interest Rate

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

Policy Effects and Cost 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 Economies

Critical Thinking About Research

Filters

Exam 1: The Scope and Method of Economics

An efficient economy is an economy

Refer to the information provided in Figure 1.2 below to answer the questions that follow. Figure 1.2 -Refer to Figure 1.2. The slope of the line between Points A and B is

It always rains about an hour after you finish washing your car. Concluding that washing your car caused it to rain is an example of 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. The slope of the line is

The unemployment rate was falling during all of the years that I was a student, but as soon as I graduated, the unemployment rate started to rise. Therefore, the job market was waiting until I started looking for employment to start to go bad. This statement is an example of

Positive economics seeks to understand behavior, but not make judgments.

Economics is best defined as the study of

That which we forgo, or give up, when we make a choice or a decision is known as

Which of the following is an opportunity cost of attending college?

The aggregate price level is a topic of macroeconomics.

Suppose that you sign up for a one-day cooking class at the local culinary school for $75. Once you arrive at the class, you discover that you must purchase an apron for an additional $5. In this situation, the additional $5 you pay for the apron is an example of

A(n) ________ is a formal statement of a theory.

By invoking the assumption of ceteris paribus, economists

Whenever a former governor is elected president, the unemployment rate decreases; whenever a former congressman is elected president, the inflation rate increases. This statement is an example of

Which of the following statements is not correct?

The collection and use of data to test economic theories is

Related to the Economics in Practice on p. 5: According to the Economics in Practice, ________ of the $10 retail value of a Barbie doll is captured in the United States.

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

Money, the Federal Reserve, and the Interest Rate

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

Policy Effects and Cost 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 Economies

Critical Thinking About Research

Filters