Question 1

Ceteris paribus means allowing all things to change.

Accepted Answer

A) True 
 B)False

Question 2

The BEST example of making a choice at the margin is:

Accepted Answer

A)  buying a new car. 
B)  quitting your job. 
C)  a coffee drinker drinking another cup of coffee. 
D)  attending college. 
A)  buying a new car. 
B)  quitting your job. 
C)  a coffee drinker drinking another cup of coffee. 
D)  attending college.

Question 3

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 4

Scarcity exists when:

Accepted Answer

A)  a choice must be made among two or more alternatives. 
B)  we face the notion of "all other things unchanged." 
C)  countries and people find themselves facing poverty. 
D)  the notions of normative economics come into play. 
A)  a choice must be made among two or more alternatives. 
B)  we face the notion of "all other things unchanged." 
C)  countries and people find themselves facing poverty. 
D)  the notions of normative economics come into play.

Question 5

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 6

The primary emphasis in macroeconomics is on:

Accepted Answer

A)  how firms set prices. 
B)  aggregates in the economy. 
C)  marginal analysis and normative economics. 
D)  international trade and environmental economics. 
A)  how firms set prices. 
B)  aggregates in the economy. 
C)  marginal analysis and normative economics. 
D)  international trade and environmental economics.

Question 7

Most economists' disagreements are a result of:

Accepted Answer

A)  factual considerations. 
B)  positive economics. 
C)  the scientific method. 
D)  normative considerations. 
A)  factual considerations. 
B)  positive economics. 
C)  the scientific method. 
D)  normative considerations.

Question 8

The observed correlation between baldness and heart disease demonstrates that:

Accepted Answer

A)  being bald causes a man to have heart disease. 
B)  being bald actually makes heart disease less likely. 
C)  bald men are generally unreliable. 
D)  there is probably some other factor that causes both baldness and heart disease. 
A)  being bald causes a man to have heart disease. 
B)  being bald actually makes heart disease less likely. 
C)  bald men are generally unreliable. 
D)  there is probably some other factor that causes both baldness and heart disease.

Question 9

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 10

The current rate of unemployment of 5 percent is too high. This is a _______ statement.

Accepted Answer

A)  normative 
B)  ceteris paribus 
C)  positive 
D)  fallacy of false cause 
A)  normative 
B)  ceteris paribus 
C)  positive 
D)  fallacy of false cause

Question 11

A key theme fundamental to all of economics is:

Accepted Answer

A)  there are limited wants. 
B)  we are a rich country but are simply not aware of it. 
C)  people have unlimited wants facing limited means to satisfy them. 
D)  there are unlimited resources. 
A)  there are limited wants. 
B)  we are a rich country but are simply not aware of it. 
C)  people have unlimited wants facing limited means to satisfy them. 
D)  there are unlimited resources.

Question 12

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.

Question 13

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 14

Suppose that voters in your community pass a one-cent sales tax increase to fund education, knowing full well they will have to forgo other goods they typically consume. This primarily addresses the economic question of:

Accepted Answer

A)  How will each good be produced? 
B)  For whom shall the goods be produced? 
C)  Why will the resources be used to produce goods? 
D)  What goods and services should a society produce? 
A)  How will each good be produced? 
B)  For whom shall the goods be produced? 
C)  Why will the resources be used to produce goods? 
D)  What goods and services should a society produce?

Question 15

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

Accepted Answer

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

Question 16

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 17

An example of a positive statement is:

Accepted Answer

A)  The rate of unemployment should be 4 percent. 
B)  A high rate of economic growth is good for the country. 
C)  an increase in investment spending tends to reduce unemployment. 
D)  Everyone in the country needs to be covered by national health insurance. 
A)  The rate of unemployment should be 4 percent. 
B)  A high rate of economic growth is good for the country. 
C)  an increase in investment spending tends to reduce unemployment. 
D)  Everyone in the country needs to be covered by national health insurance.

Question 18

An answer to the question "How are goods produced?" determines:

Accepted Answer

A)  who receives the goods that are produced. 
B)  how tastes and preferences are determined. 
C)  how resources are combined in the production of goods. 
D)  the types and quantities of goods and services produced. 
A)  who receives the goods that are produced. 
B)  how tastes and preferences are determined. 
C)  how resources are combined in the production of goods. 
D)  the types and quantities of goods and services produced.

Question 19

Unemployment and inflation are:

Accepted Answer

A)  not relevant in the U.S. economy today. 
B)  major topics in macroeconomics. 
C)  unique only to capitalistic economies. 
D)  very important in the study of microeconomics. 
A)  not relevant in the U.S. economy today. 
B)  major topics in macroeconomics. 
C)  unique only to capitalistic economies. 
D)  very important in the study of microeconomics.

Question 20

The problem of determining for whom to produce exists because:

Accepted Answer

A)  government regulations prevent firms from producing the kinds of goods that consumers want. 
B)  a decision that one person or group will receive a good or service usually means that another person or group will not. 
C)  taxes on firms make it more costly for them to produce all the goods that people want. 
D)  taxes on consumers make it more difficult for them to buy all the goods they want. 
A)  government regulations prevent firms from producing the kinds of goods that consumers want. 
B)  a decision that one person or group will receive a good or service usually means that another person or group will not. 
C)  taxes on firms make it more costly for them to produce all the goods that people want. 
D)  taxes on consumers make it more difficult for them to buy all the goods they want.

Ceteris paribus means allowing all things to change.

The BEST example of making a choice at the margin is:

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

Scarcity exists when:

Microeconomics deals with:

The primary emphasis in macroeconomics is on:

Most economists' disagreements are a result of:

The observed correlation between baldness and heart disease demonstrates that:

A normative statement deals with:

The current rate of unemployment of 5 percent is too high. This is a _______ statement.

A key theme fundamental to all of economics is:

Economics is a:

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

Suppose that voters in your community pass a one-cent sales tax increase to fund education, knowing full well they will have to forgo other goods they typically consume. This primarily addresses the economic question of:

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

Macroeconomics deals with:

An example of a positive statement is:

An answer to the question "How are goods produced?" determines:

Unemployment and inflation are:

The problem of determining for whom to produce exists because:

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

Ceteris paribus means allowing all things to change.

The BEST example of making a choice at the margin is:

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

Scarcity exists when:

Microeconomics deals with:

The primary emphasis in macroeconomics is on:

Most economists' disagreements are a result of:

The observed correlation between baldness and heart disease demonstrates that:

A normative statement deals with:

The current rate of unemployment of 5 percent is too high. This is a _______ statement.

A key theme fundamental to all of economics is:

Economics is a:

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

Suppose that voters in your community pass a one-cent sales tax increase to fund education, knowing full well they will have to forgo other goods they typically consume. This primarily addresses the economic question of:

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

Macroeconomics deals with:

An example of a positive statement is:

An answer to the question "How are goods produced?" determines:

Unemployment and inflation are:

The problem of determining for whom to produce exists because:

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