Question 1

The "all other things unchanged" assumption is used to:

Accepted Answer

A)  express the fundamental questions in economics. 
B)  approximate real-world conditions. 
C)  simplify the very complex real world. 
D)  do all of the above. 
A)  express the fundamental questions in economics. 
B)  approximate real-world conditions. 
C)  simplify the very complex real world. 
D)  do all of the above.

Question 2

A basic assumption used in many economic models is:

Accepted Answer

A)  as price goes up, the amount purchased will go up too. 
B)  as price goes up, less will be offered for sale on the market. 
C)  if the underlying theory doesn't represent reality, it is not useful. 
D)  ceteris paribus, which means all other things remain unchanged. 
A)  as price goes up, the amount purchased will go up too. 
B)  as price goes up, less will be offered for sale on the market. 
C)  if the underlying theory doesn't represent reality, it is not useful. 
D)  ceteris paribus, which means all other things remain unchanged.

Question 3

The three fundamental economic questions of what, how, and for whom:

Accepted Answer

A)  exist because of scarcity. 
B)  are much more serious in a socialist system. 
C)  are not serious in a capitalistic system. 
D)  are not relevant in the industrialized world of today. 
A)  exist because of scarcity. 
B)  are much more serious in a socialist system. 
C)  are not serious in a capitalistic system. 
D)  are not relevant in the industrialized world of today.

Question 4

All choices have monetary costs.

Accepted Answer

A) True 
 B)False

Question 5

In the 1930s, the federal government established the social security system to provide a minimum level of income to elderly and disabled people. This primarily addressed the economic question of:

Accepted Answer

A)  When will each good be produced? 
B)  For whom shall the goods be produced? 
C)  What goods and services should a society produce? 
D)  How should the resources be organized for production? 
A)  When will each good be produced? 
B)  For whom shall the goods be produced? 
C)  What goods and services should a society produce? 
D)  How should the resources be organized for production?

Question 6

A person who mistakenly assumes that because one event follows another, the second event results from the first commits the fallacy of:

Accepted Answer

A)  division. 
B)  addition. 
C)  composition. 
D)  false cause. 
A)  division. 
B)  addition. 
C)  composition. 
D)  false cause.

Question 7

Microeconomics is a branch of economics that examines the impact of choices on aggregates in the economy.

Accepted Answer

A) True 
 B)False

Question 8

A normative statement deals with:

Accepted Answer

A)  the facts. 
B)  what was, is, or will be. 
C)  what ought to be. 
D)  the scientific method. 
A)  the facts. 
B)  what was, is, or will be. 
C)  what ought to be. 
D)  the scientific method.

Question 9

Economics is a:

Accepted Answer

A)  social science that studies goods with no alternative uses. 
B)  natural science that studies goods with no alternative uses. 
C)  social science concerned chiefly with how people choose among alternatives. 
D)  social science concerned chiefly with reasons why society has unlimited resources. 
A)  social science that studies goods with no alternative uses. 
B)  natural science that studies goods with no alternative uses. 
C)  social science concerned chiefly with how people choose among alternatives. 
D)  social science concerned chiefly with reasons why society has unlimited resources.

Question 10

The problem of scarcity is confronted by:

Accepted Answer

A)  industrialized societies. 
B)  pre-industrialized societies. 
C)  societies governed by communist philosophies. 
D)  all societies. 
A)  industrialized societies. 
B)  pre-industrialized societies. 
C)  societies governed by communist philosophies. 
D)  all societies.

Question 11

Microeconomics deals with:

Accepted Answer

A)  the working of the entire economy or large sectors of it. 
B)  employment, growth, and inflation. 
C)  individual units in the economy. 
D)  normative economics for the most part. 
A)  the working of the entire economy or large sectors of it. 
B)  employment, growth, and inflation. 
C)  individual units in the economy. 
D)  normative economics for the most part.

Question 12

A free good is:

Accepted Answer

A)  also a scarce good. 
B)  a relatively abundant good. 
C)  a good with no opportunity cost. 
D)  a good with relatively low opportunity cost. 
A)  also a scarce good. 
B)  a relatively abundant good. 
C)  a good with no opportunity cost. 
D)  a good with relatively low opportunity cost.

Question 13

Macroeconomics deals with:

Accepted Answer

A)  bits and pieces of the economy. 
B)  the question of how a business unit should operate profitably. 
C)  the analysis of the aggregate values in the economy. 
D)  ceteris paribus. 
A)  bits and pieces of the economy. 
B)  the question of how a business unit should operate profitably. 
C)  the analysis of the aggregate values in the economy. 
D)  ceteris paribus.

Question 14

Making choices that are expected to achieve the highest possible value for some objective is termed:

Accepted Answer

A)  maximizing. 
B)  minimizing. 
C)  sanitizing. 
D)  satisfying. 
A)  maximizing. 
B)  minimizing. 
C)  sanitizing. 
D)  satisfying.

Question 15

The branch of economics that examines the impact of choices on aggregates in the economy is:

Accepted Answer

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

Question 16

Ceteris paribus means:

Accepted Answer

A)  allowing all other things to change. 
B)  making value judgments. 
C)  all other things unchanged. 
D)  differentiating between macroeconomics and microeconomics. 
A)  allowing all other things to change. 
B)  making value judgments. 
C)  all other things unchanged. 
D)  differentiating between macroeconomics and microeconomics.

Question 17

The current rate of unemployment is 5 percent. This statement:

Accepted Answer

A)  is positive. 
B)  is normative. 
C)  involves a value judgment. 
D)  is a personal reflection and has no value in economics. 
A)  is positive. 
B)  is normative. 
C)  involves a value judgment. 
D)  is a personal reflection and has no value in economics.

Question 18

Positive statements are:

Accepted Answer

A)  microeconomic in nature. 
B)  macroeconomic in nature. 
C)  statements involving value judgments. 
D)  statements that can be tested. 
A)  microeconomic in nature. 
B)  macroeconomic in nature. 
C)  statements involving value judgments. 
D)  statements that can be tested.

Question 19

Individuals will usually make choices to minimize the value of some objective.

Accepted Answer

A) True 
 B)False

Question 20

A variable that responds to a change in another variable is called a(n) _______ variable.

Accepted Answer

A)  independent 
B)  dependent 
C)  theoretical 
D)  all of the above are true 
A)  independent 
B)  dependent 
C)  theoretical 
D)  all of the above are true

The "all other things unchanged" assumption is used to:

A basic assumption used in many economic models is:

The three fundamental economic questions of what, how, and for whom:

All choices have monetary costs.

In the 1930s, the federal government established the social security system to provide a minimum level of income to elderly and disabled people. This primarily addressed the economic question of:

A person who mistakenly assumes that because one event follows another, the second event results from the first commits the fallacy of:

Microeconomics is a branch of economics that examines the impact of choices on aggregates in the economy.

A normative statement deals with:

Economics is a:

The problem of scarcity is confronted by:

Microeconomics deals with:

A free good is:

Macroeconomics deals with:

Making choices that are expected to achieve the highest possible value for some objective is termed:

The branch of economics that examines the impact of choices on aggregates in the economy is:

Ceteris paribus means:

The current rate of unemployment is 5 percent. This statement:

Positive statements are:

Individuals will usually make choices to minimize the value of some objective.

A variable that responds to a change in another variable is called a(n) _______ variable.

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

Exam 1: Economics: the Study of Choice

The "all other things unchanged" assumption is used to:

A basic assumption used in many economic models is:

The three fundamental economic questions of what, how, and for whom:

All choices have monetary costs.

In the 1930s, the federal government established the social security system to provide a minimum level of income to elderly and disabled people. This primarily addressed the economic question of:

A person who mistakenly assumes that because one event follows another, the second event results from the first commits the fallacy of:

Microeconomics is a branch of economics that examines the impact of choices on aggregates in the economy.

A normative statement deals with:

Economics is a:

The problem of scarcity is confronted by:

Microeconomics deals with:

A free good is:

Macroeconomics deals with:

Making choices that are expected to achieve the highest possible value for some objective is termed:

The branch of economics that examines the impact of choices on aggregates in the economy is:

Ceteris paribus means:

The current rate of unemployment is 5 percent. This statement:

Positive statements are:

Individuals will usually make choices to minimize the value of some objective.

A variable that responds to a change in another variable is called a(n) _______ variable.

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