Question 1

`Briefly define scarcity, choice, and opportunity cost and explain carefully how they are related and why they are so essential in the study of economics.

Accepted Answer

Scarcity refers to the limited availability of resources in comparison to the unlimited wants and needs of individuals and society. Choice is the act of selecting one option over another, based on the individual's preferences and priorities. Opportunity cost is the value of the next best alternative that is foregone when a choice is made.

These concepts are related because scarcity necessitates the need for choice, as individuals and society must decide how to allocate limited resources among competing wants and needs. When a choice is made, the opportunity cost comes into play, as the value of the next best alternative is sacrificed in order to pursue the chosen option.

These concepts are essential in the study of economics because they form the foundation of economic decision-making. Understanding scarcity, choice, and opportunity cost helps economists analyze how resources are allocated, how individuals and businesses make decisions, and how policies and interventions can impact the economy. By recognizing the trade-offs involved in decision-making, economists can better understand the implications of their choices and make more informed decisions to address economic issues and improve overall welfare. Therefore, scarcity, choice, and opportunity cost are fundamental concepts that underpin the study of economics and are crucial for understanding how resources are utilized and distributed in society.

Question 2

Reaching the incorrect conclusion that one event causes another because the events tend to occur together is called:

Accepted Answer

A)  the scientific method. 
B)  the economic way of thinking. 
C)  making choices at the margin. 
D)  the fallacy of false cause. 
A)  the scientific method. 
B)  the economic way of thinking. 
C)  making choices at the margin. 
D)  the fallacy of false cause. D

Question 3

Economics is a:

Accepted Answer

A)  social science that deals with making choices among alternatives. 
B)  natural science that concerns itself with allocating relatively scarce resources among alternative ends. 
C)  science that has no theories or models based on the scientific method. 
D)  humanities course that mainly concerns itself with limited wants versus unlimited resources. 
A)  social science that deals with making choices among alternatives. 
B)  natural science that concerns itself with allocating relatively scarce resources among alternative ends. 
C)  science that has no theories or models based on the scientific method. 
D)  humanities course that mainly concerns itself with limited wants versus unlimited resources. A

Question 4

The branch of economics that examines the choices of consumers and firms is:

Accepted Answer

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

Question 5

When we are forced to make choices we are facing the concept of:

Accepted Answer

A)  ceteris paribus. 
B)  free goods. 
C)  scarcity. 
D)  the margin. 
A)  ceteris paribus. 
B)  free goods. 
C)  scarcity. 
D)  the margin.

Question 6

A variable that induces a change in another variable is a(n):

Accepted Answer

A)  dependent variable. 
B)  independent variable. 
C)  codependent variable. 
D)  constant variable. 
A)  dependent variable. 
B)  independent variable. 
C)  codependent variable. 
D)  constant variable.

Question 7

The study of a single firm and how it determines prices would fall under:

Accepted Answer

A)  macroeconomics. 
B)  microeconomics. 
C)  the study of inflation. 
D)  normative economics. 
A)  macroeconomics. 
B)  microeconomics. 
C)  the study of inflation. 
D)  normative economics.

Question 8

"Since economics is a science, economists must not become involved in making any value judgments in their formulation of policy." Do you agree with this statement? Explain.

Accepted Answer

I do not agree with the statement that e

Question 9

The Case in Point on "baldness and heart disease" suggests that by preventing baldness:

Accepted Answer

A)  men can reduce the likelihood they will develop colon cancer. 
B)  men are unlikely to influence their chances of having heart problems. 
C)  men are likely to reduce their chances of having heart problems. 
D)  men can live longer. 
A)  men can reduce the likelihood they will develop colon cancer. 
B)  men are unlikely to influence their chances of having heart problems. 
C)  men are likely to reduce their chances of having heart problems. 
D)  men can live longer.

Question 10

A proposition about the relationship between two variables that can be proven false is called:

Accepted Answer

A)  a hypothesis. 
B)  a law. 
C)  a theory. 
D)  the scientific method. 
A)  a hypothesis. 
B)  a law. 
C)  a theory. 
D)  the scientific method.

Question 11

A systematic set of procedures through which knowledge is created is:

Accepted Answer

A)  the economy. 
B)  the scientific method. 
C)  a market. 
D)  a model. 
A)  the economy. 
B)  the scientific method. 
C)  a market. 
D)  a model.

Question 12

Whenever a choice is made:

Accepted Answer

A)  the cost of that choice could be referred to as opportunity cost. 
B)  the cost is easy to measure in dollar terms. 
C)  a free good must be involved. 
D)  scarcity is not the problem. 
A)  the cost of that choice could be referred to as opportunity cost. 
B)  the cost is easy to measure in dollar terms. 
C)  a free good must be involved. 
D)  scarcity is not the problem.

Question 13

Define positive and normative statements and give four examples of each.

Accepted Answer

Positive statements are statements that

Question 14

The "all other things unchanged" assumption is useful because it:

Accepted Answer

A)  states the main economic objectives. 
B)  is a vehicle for determining whether a particular outcome is "good" or "bad.". 
C)  helps to approximate real-world conditions. 
D)  helps to restrict analysis to the effect of a single economic factor. 
A)  states the main economic objectives. 
B)  is a vehicle for determining whether a particular outcome is "good" or "bad.". 
C)  helps to approximate real-world conditions. 
D)  helps to restrict analysis to the effect of a single economic factor.

Question 15

Explain how and why the concept of "all other things unchanged" is so important in the study of economics.

Accepted Answer

The concept of "all other things unchang

Question 16

According to the text, which of the following is true?

Accepted Answer

A)  Scientists can prove a hypothesis is true. 
B)  Scientists can show that a hypothesis is false. 
C)  Economists really don't try to use the scientific method. 
D)  None of the above is true. 
A)  Scientists can prove a hypothesis is true. 
B)  Scientists can show that a hypothesis is false. 
C)  Economists really don't try to use the scientific method. 
D)  None of the above is true.

Question 17

The Case in Point on the Simpsons indicated that time is:

Accepted Answer

A)  a scare resource. 
B)  a resource without alternative uses. 
C)  a ubiquitous resource. 
D)  not a resource. 
A)  a scare resource. 
B)  a resource without alternative uses. 
C)  a ubiquitous resource. 
D)  not a resource.

Question 18

The incorrect presumption that because two events tend to occur together, one must cause the other is the:

Accepted Answer

A)  confusion of economists. 
B)  blunder of science. 
C)  fallacy of false cause. 
D)  error of inclusion. 
A)  confusion of economists. 
B)  blunder of science. 
C)  fallacy of false cause. 
D)  error of inclusion.

Question 19

Opportunity cost is:

Accepted Answer

A)  zero for the use of a free combo meal offer. 
B)  the dollar payment for a product. 
C)  the benefit derived from a product. 
D)  the value of the best alternative forgone in making any choice. 
A)  zero for the use of a free combo meal offer. 
B)  the dollar payment for a product. 
C)  the benefit derived from a product. 
D)  the value of the best alternative forgone in making any choice.

Question 20

Scarcity is determined by the existence of bad alternatives.

Accepted Answer

A) True 
 B)False

`Briefly define scarcity, choice, and opportunity cost and explain carefully how they are related and why they are so essential in the study of economics.

Reaching the incorrect conclusion that one event causes another because the events tend to occur together is called:

Economics is a:

The branch of economics that examines the choices of consumers and firms is:

When we are forced to make choices we are facing the concept of:

A variable that induces a change in another variable is a(n):

The study of a single firm and how it determines prices would fall under:

"Since economics is a science, economists must not become involved in making any value judgments in their formulation of policy." Do you agree with this statement? Explain.

The Case in Point on "baldness and heart disease" suggests that by preventing baldness:

A proposition about the relationship between two variables that can be proven false is called:

A systematic set of procedures through which knowledge is created is:

Whenever a choice is made:

Define positive and normative statements and give four examples of each.

The "all other things unchanged" assumption is useful because it:

Explain how and why the concept of "all other things unchanged" is so important in the study of economics.

According to the text, which of the following is true?

The Case in Point on the Simpsons indicated that time is:

The incorrect presumption that because two events tend to occur together, one must cause the other is the:

Opportunity cost is:

Scarcity is determined by the existence of bad alternatives.

Demand and Supply

Applications of Demand and Supply

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Economic Development

Socialist Economies in Transition

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Exam 1: Economics: the Study of Choice

`Briefly define scarcity, choice, and opportunity cost and explain carefully how they are related and why they are so essential in the study of economics.

Reaching the incorrect conclusion that one event causes another because the events tend to occur together is called:

Economics is a:

The branch of economics that examines the choices of consumers and firms is:

When we are forced to make choices we are facing the concept of:

A variable that induces a change in another variable is a(n):

The study of a single firm and how it determines prices would fall under:

"Since economics is a science, economists must not become involved in making any value judgments in their formulation of policy." Do you agree with this statement? Explain.

The Case in Point on "baldness and heart disease" suggests that by preventing baldness:

A proposition about the relationship between two variables that can be proven false is called:

A systematic set of procedures through which knowledge is created is:

Whenever a choice is made:

Define positive and normative statements and give four examples of each.

The "all other things unchanged" assumption is useful because it:

Explain how and why the concept of "all other things unchanged" is so important in the study of economics.

According to the text, which of the following is true?

The Case in Point on the Simpsons indicated that time is:

The incorrect presumption that because two events tend to occur together, one must cause the other is the:

Opportunity cost is:

Scarcity is determined by the existence of bad alternatives.

Demand and Supply

Applications of Demand and Supply

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Economic Development

Socialist Economies in Transition

Filters