Question 1

A feature that distinguishes economists' approach to making choices is (are):

Accepted Answer

A)  assigning opportunity costs a major role in their analyses of choices. 
B)  assuming individuals make choices to maximize objectives. 
C)  emphasizing that choices are made at the margin. 
D)  all of the above. 
A)  assigning opportunity costs a major role in their analyses of choices. 
B)  assuming individuals make choices to maximize objectives. 
C)  emphasizing that choices are made at the margin. 
D)  all of the above.

Question 2

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

Question 3

An attempt should always be made to maximize opportunity cost.

Accepted Answer

A) True 
 B)False

Question 4

Many disagreements among economists result because:

Accepted Answer

A)  economists deal only with positive economics. 
B)  economists sometimes make normative judgments. 
C)  economics is a social science. 
D)  economics deals so much with theories and models. 
A)  economists deal only with positive economics. 
B)  economists sometimes make normative judgments. 
C)  economics is a social science. 
D)  economics deals so much with theories and models.

Question 5

The economic way of thinking includes:

Accepted Answer

A)  more attention paid to benefits rather than the costs involved in any choice. 
B)  the assumption that individuals choose to maximize some objective. 
C)  emphasis on how choices affect total values rather than marginal values. 
D)  the notion that the world has solved the problem of scarcity. 
A)  more attention paid to benefits rather than the costs involved in any choice. 
B)  the assumption that individuals choose to maximize some objective. 
C)  emphasis on how choices affect total values rather than marginal values. 
D)  the notion that the world has solved the problem of scarcity.

Question 6

The questions of what goods to produce, how to produce them, and for whom to produce them are of concern only in advanced industrial economies.

Accepted Answer

A) True 
 B)False

Question 7

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 8

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 9

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 10

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 11

"Smokers are more likely to be murdered than nonsmokers." This statement is an example of:

Accepted Answer

A)  the fallacy of unintended consequences. 
B)  a positive economic statement. 
C)  a normative economic statement. 
D)  a value judgment. 
A)  the fallacy of unintended consequences. 
B)  a positive economic statement. 
C)  a normative economic statement. 
D)  a value judgment.

Question 12

The concept of scarcity indicates that:

Accepted Answer

A)  most goods have no alternative uses. 
B)  almost all goods have alternative uses. 
C)  most decisions can be made without sacrificing alternatives. 
D)  certain societies are able to overcome the constraints imposed by alternative uses of resources. 
A)  most goods have no alternative uses. 
B)  almost all goods have alternative uses. 
C)  most decisions can be made without sacrificing alternatives. 
D)  certain societies are able to overcome the constraints imposed by alternative uses of resources.

Question 13

Suppose you observe that the sun sets every evening after the six o'clock business report. If you conclude that the six o'clock business report makes the sun set, you are guilty of the fallacy of:

Accepted Answer

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

Question 14

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 15

Anything that has alternative uses has an opportunity cost and is, therefore, scarce.

Accepted Answer

A) True 
 B)False

Question 16

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 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

A scarce resource is one that:

Accepted Answer

A)  is free. 
B)  is abundant. 
C)  has alternative uses. 
D)  has no alternative uses. 
A)  is free. 
B)  is abundant. 
C)  has alternative uses. 
D)  has no alternative uses.

Question 19

Economists are:

Accepted Answer

A)  concerned with developing theories but not interested in solving problems. 
B)  interested in solving problems but not concerned with developing theories. 
C)  reluctant to predict changes in variables such as prices, employment, and spending. 
D)  not always in agreement on the best way to implement policy decisions. 
A)  concerned with developing theories but not interested in solving problems. 
B)  interested in solving problems but not concerned with developing theories. 
C)  reluctant to predict changes in variables such as prices, employment, and spending. 
D)  not always in agreement on the best way to implement policy decisions.

Question 20

The fundamental economic questions that every economic system must answer are:

Accepted Answer

A)  what, how, and for whom. 
B)  what, why, and for whom. 
C)  when, why, and for whom. 
D)  how, when, and how much. 
A)  what, how, and for whom. 
B)  what, why, and for whom. 
C)  when, why, and for whom. 
D)  how, when, and how much.

A feature that distinguishes economists' approach to making choices is (are):

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

An attempt should always be made to maximize opportunity cost.

Many disagreements among economists result because:

The economic way of thinking includes:

The questions of what goods to produce, how to produce them, and for whom to produce them are of concern only in advanced industrial economies.

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:

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

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

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

"Smokers are more likely to be murdered than nonsmokers." This statement is an example of:

The concept of scarcity indicates that:

Suppose you observe that the sun sets every evening after the six o'clock business report. If you conclude that the six o'clock business report makes the sun set, you are guilty of the fallacy of:

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

Anything that has alternative uses has an opportunity cost and is, therefore, scarce.

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

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

A scarce resource is one that:

Economists are:

The fundamental economic questions that every economic system must answer are:

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 feature that distinguishes economists' approach to making choices is (are):

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

An attempt should always be made to maximize opportunity cost.

Many disagreements among economists result because:

The economic way of thinking includes:

The questions of what goods to produce, how to produce them, and for whom to produce them are of concern only in advanced industrial economies.

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:

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

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

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

"Smokers are more likely to be murdered than nonsmokers." This statement is an example of:

The concept of scarcity indicates that:

Suppose you observe that the sun sets every evening after the six o'clock business report. If you conclude that the six o'clock business report makes the sun set, you are guilty of the fallacy of:

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

Anything that has alternative uses has an opportunity cost and is, therefore, scarce.

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

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

A scarce resource is one that:

Economists are:

The fundamental economic questions that every economic system must answer are:

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