Question 1

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 2

One question that arises when determining for whom goods and services should be produced is:

Accepted Answer

A)  Who gets how much of the economic pie? 
B)  How can we import more goods for domestic consumption? 
C)  How can we reduce exports so as to leave more goods for domestic consumption? 
D)  Should society outlaw child labor? 
A)  Who gets how much of the economic pie? 
B)  How can we import more goods for domestic consumption? 
C)  How can we reduce exports so as to leave more goods for domestic consumption? 
D)  Should society outlaw child labor?

Question 3

The economic way of thinking pays special attention to costs, assumes individuals seek to maximize some objective, and focuses on choices at the margin.

Accepted Answer

A) True 
 B)False

Question 4

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 5

The fallacy of false cause is committed when a person mistakenly assumes that one event causes another because the first event precedes the second.

Accepted Answer

A) True 
 B)False

Question 6

The models used in economics:

Accepted Answer

A)  are usually limited to variables that are directly related. 
B)  are essentially not reliable because they are not testable in the real world. 
C)  are of necessity unrealistic and have no relationship to the real world. 
D)  emphasize basic relationships by abstracting from complexities in the everyday world. 
A)  are usually limited to variables that are directly related. 
B)  are essentially not reliable because they are not testable in the real world. 
C)  are of necessity unrealistic and have no relationship to the real world. 
D)  emphasize basic relationships by abstracting from complexities in the everyday world.

Question 7

"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 8

A hypothesis is an assertion that can be:

Accepted Answer

A)  proven to be false. 
B)  proven to be true. 
C)  proven to be true or false. 
D)  tested only in the normative sense. 
A)  proven to be false. 
B)  proven to be true. 
C)  proven to be true or false. 
D)  tested only in the normative sense.

Question 9

Opportunity cost is the expected value of the alternative not chosen.

Accepted Answer

A) True 
 B)False

Question 10

Explain the following statement: "The relative scarcity of resources makes the operation of any economic system a matter of choosing among various alternatives."

Accepted Answer

The statement "The relative scarcity of

Question 11

The opportunity cost of going to a movie is:

Accepted Answer

A)  the money spent on the ticket only. 
B)  all of the other movies that could have been seen instead. 
C)  the time spent in the theater only. 
D)  the next best use of the time and the money spent. 
A)  the money spent on the ticket only. 
B)  all of the other movies that could have been seen instead. 
C)  the time spent in the theater only. 
D)  the next best use of the time and the money spent.

Question 12

Positive statements:

Accepted Answer

A)  imply value judgments must be made. 
B)  are factual and can be tested. 
C)  deal with what ought to be. 
D)  are dealt with primarily in microeconomics. 
A)  imply value judgments must be made. 
B)  are factual and can be tested. 
C)  deal with what ought to be. 
D)  are dealt with primarily in microeconomics.

Question 13

An answer to the question "For whom" determines:

Accepted Answer

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

Question 14

Statements that are a hypothesis or statement of fact are:

Accepted Answer

A)  pecuniary. 
B)  positive. 
C)  nominal. 
D)  normative. 
A)  pecuniary. 
B)  positive. 
C)  nominal. 
D)  normative.

Question 15

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 16

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 17

Economists concerned about the behavior of individual households, firms, and industries are studying:

Accepted Answer

A)  microeconomics. 
B)  macroeconomics. 
C)  neither macroeconomics nor microeconomics. 
D)  the "forest" of economic behavior, rather than the "trees." 
A)  microeconomics. 
B)  macroeconomics. 
C)  neither macroeconomics nor microeconomics. 
D)  the "forest" of economic behavior, rather than the "trees."

Question 18

A model or theory in economics is:

Accepted Answer

A)  based mostly on value judgments. 
B)  built using relevant observations, assumptions, and abstractions. 
C)  only useful if it correctly portrays the real world and its complexities. 
D)  useful only if it is based on normative economic statements. 
A)  based mostly on value judgments. 
B)  built using relevant observations, assumptions, and abstractions. 
C)  only useful if it correctly portrays the real world and its complexities. 
D)  useful only if it is based on normative economic statements.

Question 19

Although water is very abundant in most places, it is scarce because:

Accepted Answer

A)  it has no alternative uses. 
B)  it has two or more alternative uses. 
C)  it is a free good and not expensive. 
D)  scarce goods in general are not all that costly. 
A)  it has no alternative uses. 
B)  it has two or more alternative uses. 
C)  it is a free good and not expensive. 
D)  scarce goods in general are not all that costly.

Question 20

Distinguish between microeconomics and macroeconomics.

Accepted Answer

The answer of Distinguish between microeconomics and macroeconomics....

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

One question that arises when determining for whom goods and services should be produced is:

The economic way of thinking pays special attention to costs, assumes individuals seek to maximize some objective, and focuses on choices at the margin.

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

The fallacy of false cause is committed when a person mistakenly assumes that one event causes another because the first event precedes the second.

The models used in economics:

"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.

A hypothesis is an assertion that can be:

Opportunity cost is the expected value of the alternative not chosen.

Explain the following statement: "The relative scarcity of resources makes the operation of any economic system a matter of choosing among various alternatives."

The opportunity cost of going to a movie is:

Positive statements:

An answer to the question "For whom" determines:

Statements that are a hypothesis or statement of fact are:

Positive statements are:

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

Economists concerned about the behavior of individual households, firms, and industries are studying:

A model or theory in economics is:

Although water is very abundant in most places, it is scarce because:

Distinguish between microeconomics and macroeconomics.

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

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Exam 1: Economics: the Study of Choice

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

One question that arises when determining for whom goods and services should be produced is:

The economic way of thinking pays special attention to costs, assumes individuals seek to maximize some objective, and focuses on choices at the margin.

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

The fallacy of false cause is committed when a person mistakenly assumes that one event causes another because the first event precedes the second.

The models used in economics:

"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.

A hypothesis is an assertion that can be:

Opportunity cost is the expected value of the alternative not chosen.

Explain the following statement: "The relative scarcity of resources makes the operation of any economic system a matter of choosing among various alternatives."

The opportunity cost of going to a movie is:

Positive statements:

An answer to the question "For whom" determines:

Statements that are a hypothesis or statement of fact are:

Positive statements are:

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

Economists concerned about the behavior of individual households, firms, and industries are studying:

A model or theory in economics is:

Although water is very abundant in most places, it is scarce because:

Distinguish between microeconomics and macroeconomics.

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