Question 1

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 2

Which of the following statements is (are) true?

Accepted Answer

A)  A model is a set of simplifying assumptions about some aspect of the real world. 
B)  Models are based on assumed conditions that are simpler than those of the real world. 
C)  A model cannot be a complete representation of the real world. 
D)  All of the above are true. 
A)  A model is a set of simplifying assumptions about some aspect of the real world. 
B)  Models are based on assumed conditions that are simpler than those of the real world. 
C)  A model cannot be a complete representation of the real world. 
D)  All of the above are true.

Question 3

A hypothesis that has been tested extensively without being rejected and has won widespread acceptance is a:

Accepted Answer

A)  model. 
B)  constant. 
C)  variable. 
D)  theory. 
A)  model. 
B)  constant. 
C)  variable. 
D)  theory.

Question 4

A choice made _______ is a choice whether to do a little more or a little less of something.

Accepted Answer

A)  at the front end 
B)  in the beginning 
C)  at the margin 
D)  all of the above. 
A)  at the front end 
B)  in the beginning 
C)  at the margin 
D)  all of the above.

Question 5

Each of the following statements about the use of models in the study of economics is true EXCEPT:

Accepted Answer

A)  models fit the observed facts exactly. 
B)  models are sometimes revised in light of new research findings. 
C)  models are easier to manipulate than the reality they represent. 
D)  models contain the essential features of the economic behavior being studied. 
A)  models fit the observed facts exactly. 
B)  models are sometimes revised in light of new research findings. 
C)  models are easier to manipulate than the reality they represent. 
D)  models contain the essential features of the economic behavior being studied.

Question 6

A free good is different from a scarce good because it is:

Accepted Answer

A)  not tradable. 
B)  not produced. 
C)  not scarce. 
D)  found only in nature. 
A)  not tradable. 
B)  not produced. 
C)  not scarce. 
D)  found only in nature.

Question 7

Something whose value does not change is a:

Accepted Answer

A)  variable. 
B)  constant. 
C)  hypothesis. 
D)  all of the above. 
A)  variable. 
B)  constant. 
C)  hypothesis. 
D)  all of the above.

Question 8

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 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

An example of a normative statement is:

Accepted Answer

A)  The rate of unemployment is 4 percent. 
B)  A high rate of economic growth is good for the country. 
C)  The federal government spends half of its budget on national defense. 
D)  People with health insurance tend to spend more on health care than those who are uninsured. 
A)  The rate of unemployment is 4 percent. 
B)  A high rate of economic growth is good for the country. 
C)  The federal government spends half of its budget on national defense. 
D)  People with health insurance tend to spend more on health care than those who are uninsured.

Question 11

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 12

Two important notions in economics are the scarcity of resources and the tremendous magnitude of the wants of people. Given this, evaluate and explain the following statement: "The study of economics is essentially to investigate how to maximize the satisfaction of wants utilizing available resources."

Accepted Answer

The statement "The study of economics is

Question 13

Margin suggests additional or incremental.

Accepted Answer

A) True 
 B)False

Question 14

The answer to, "What goods are to be produced?" deals with:

Accepted Answer

A)  who gets the goods. 
B)  how tastes and preferences are determined. 
C)  how resources are combined to produce goods and services. 
D)  the kinds and quantities of goods and services produced. 
A)  who gets the goods. 
B)  how tastes and preferences are determined. 
C)  how resources are combined to produce goods and services. 
D)  the kinds and quantities of goods and services produced.

Question 15

A(n) _______ does not pose the problem of scarcity; one use of the good is not an alternative to another use.

Accepted Answer

A)  free good 
B)  scarce good 
C)  economic good 
D)  monetary good 
A)  free good 
B)  scarce good 
C)  economic good 
D)  monetary good

Question 16

Explain the rationale behind the assertion that economics is a social science and uses the scientific method.

Accepted Answer

Economics is considered a social science

Question 17

Opportunity cost is:

Accepted Answer

A)  the costs of all sacrifices not chosen when a choice is made. 
B)  the highest valued other choice that could have been made. 
C)  the result of having made a bad choice. 
D)  the result of not making choices at the margin. 
A)  the costs of all sacrifices not chosen when a choice is made. 
B)  the highest valued other choice that could have been made. 
C)  the result of having made a bad choice. 
D)  the result of not making choices at the margin.

Question 18

A simplified representation of a particular problem is a:

Accepted Answer

A)  model. 
B)  constant. 
C)  hypothesis. 
D)  law. 
A)  model. 
B)  constant. 
C)  hypothesis. 
D)  law.

Question 19

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 20

Microeconomics is most likely to be concerned with the:

Accepted Answer

A)  economy as a whole. 
B)  activity of large segments of the economy. 
C)  economic behavior of specific parts or units of the economy. 
D)  economy-wide trends in unemployment, prices, and production. 
A)  economy as a whole. 
B)  activity of large segments of the economy. 
C)  economic behavior of specific parts or units of the economy. 
D)  economy-wide trends in unemployment, prices, and production.

A basic assumption used in many economic models is:

Which of the following statements is (are) true?

A hypothesis that has been tested extensively without being rejected and has won widespread acceptance is a:

A choice made _______ is a choice whether to do a little more or a little less of something.

Each of the following statements about the use of models in the study of economics is true EXCEPT:

A free good is different from a scarce good because it is:

Something whose value does not change is a:

Opportunity cost is:

Economics is a:

An example of a normative statement is:

A free good is:

Margin suggests additional or incremental.

The answer to, "What goods are to be produced?" deals with:

A(n) _______ does not pose the problem of scarcity; one use of the good is not an alternative to another use.

Explain the rationale behind the assertion that economics is a social science and uses the scientific method.

Opportunity cost is:

A simplified representation of a particular problem is a:

The problem of scarcity is confronted by:

Microeconomics is most likely to be concerned with the:

Demand and Supply

Applications of Supply and Demand

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

Filters

Exam 1: Economics: the Study of Choice

A basic assumption used in many economic models is:

Which of the following statements is (are) true?

A hypothesis that has been tested extensively without being rejected and has won widespread acceptance is a:

A choice made _______ is a choice whether to do a little more or a little less of something.

Each of the following statements about the use of models in the study of economics is true EXCEPT:

A free good is different from a scarce good because it is:

Something whose value does not change is a:

Opportunity cost is:

Economics is a:

An example of a normative statement is:

A free good is:

Margin suggests additional or incremental.

The answer to, "What goods are to be produced?" deals with:

A(n) _______ does not pose the problem of scarcity; one use of the good is not an alternative to another use.

Explain the rationale behind the assertion that economics is a social science and uses the scientific method.

Opportunity cost is:

A simplified representation of a particular problem is a:

The problem of scarcity is confronted by:

Microeconomics is most likely to be concerned with the:

Demand and Supply

Applications of Supply and Demand

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

Filters