Question 1

A theory that has won virtually universal acceptance is a:

Accepted Answer

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

Question 2

The problem of determining what goods and services society should produce:

Accepted Answer

A)  exists because we can produce more than we need or want. 
B)  exists because there are not enough resources to provide all the goods and services that people want to purchase. 
C)  would not exist if all goods and services were scarce. 
D)  would not exist if government owned all of the resources. 
A)  exists because we can produce more than we need or want. 
B)  exists because there are not enough resources to provide all the goods and services that people want to purchase. 
C)  would not exist if all goods and services were scarce. 
D)  would not exist if government owned all of the resources.

Question 3

The economic way of thinking includes:

Accepted Answer

A)  attention paid to the opportunity costs involved in any choice. 
B)  the assumption that individuals choose to average out some objective. 
C)  concern with the biological make up of decision makers. 
D)  emphasis on how choices affect total values rather than marginal values. 
A)  attention paid to the opportunity costs involved in any choice. 
B)  the assumption that individuals choose to average out some objective. 
C)  concern with the biological make up of decision makers. 
D)  emphasis on how choices affect total values rather than marginal values.

Question 4

Explain the following statement: "In economics there are few absolute solutions. Almost all problem solutions require tradeoffs."

Accepted Answer

In economics, it is rare to find absolut

Question 5

The study of how people choose among the alternatives available to them is the:

Accepted Answer

A)  definition of economics. 
B)  model of demand. 
C)  theory of opportunity costs. 
D)  method of distinguishing between microeconomics and macroeconomics. 
A)  definition of economics. 
B)  model of demand. 
C)  theory of opportunity costs. 
D)  method of distinguishing between microeconomics and macroeconomics.

Question 6

According to the textbook, economics is a:

Accepted Answer

A)  social science. 
B)  study of business decisions, not social decisions. 
C)  part of operations and management science. 
D)  part of humanities. 
A)  social science. 
B)  study of business decisions, not social decisions. 
C)  part of operations and management science. 
D)  part of humanities.

Question 7

A proposition about the relationship between two variables that can be proven false is called:

Accepted Answer

A)  a hypothesis. 
B)  a law. 
C)  a theory. 
D)  the scientific method. 
A)  a hypothesis. 
B)  a law. 
C)  a theory. 
D)  the scientific method.

Question 8

Reaching the incorrect conclusion that one event causes another because the events tend to occur together is called:

Accepted Answer

A)  the scientific method. 
B)  the economic way of thinking. 
C)  making choices at the margin. 
D)  the fallacy of false cause. 
A)  the scientific method. 
B)  the economic way of thinking. 
C)  making choices at the margin. 
D)  the fallacy of false cause.

Question 9

An example of a positive 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)  Everyone in the country needs to be covered by national health insurance. 
D)  Baseball players should not be paid higher salaries than the president of the United States. 
A)  The rate of unemployment is 4 percent. 
B)  A high rate of economic growth is good for the country. 
C)  Everyone in the country needs to be covered by national health insurance. 
D)  Baseball players should not be paid higher salaries than the president of the United States.

Question 10

A scarce resource is one that:

Accepted Answer

A)  has two or more alternative uses. 
B)  exhibits the basic properties of a free good. 
C)  is confronted only under socialist conditions. 
D)  has an unlimited supply. 
A)  has two or more alternative uses. 
B)  exhibits the basic properties of a free good. 
C)  is confronted only under socialist conditions. 
D)  has an unlimited supply.

Question 11

The incorrect presumption that because two events tend to occur together, one must cause the other is the:

Accepted Answer

A)  confusion of economists. 
B)  blunder of science. 
C)  fallacy of false cause. 
D)  error of inclusion. 
A)  confusion of economists. 
B)  blunder of science. 
C)  fallacy of false cause. 
D)  error of inclusion.

Question 12

The Case in Point on the Simpsons indicated that even fictional characters face:

Accepted Answer

A)  diminishing marginal product. 
B)  opportunity costs. 
C)  the fallacy of false cause. 
D)  positive statements. 
A)  diminishing marginal product. 
B)  opportunity costs. 
C)  the fallacy of false cause. 
D)  positive statements.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

A free good is one that can be acquired without sacrifice.

Accepted Answer

A) True 
 B)False

Question 15

Economic models are:

Accepted Answer

A)  created and used in order to duplicate virtually every aspect of the real world. 
B)  useless if they are simple. 
C)  made generally of wood, plastic, and/or metal. 
D)  built using assumptions. 
A)  created and used in order to duplicate virtually every aspect of the real world. 
B)  useless if they are simple. 
C)  made generally of wood, plastic, and/or metal. 
D)  built using assumptions.

Question 16

All choices have monetary costs.

Accepted Answer

A) True 
 B)False

Question 17

The opportunity cost of something is:

Accepted Answer

A)  greater during periods of rising prices. 
B)  equal to the money cost. 
C)  less during periods of falling prices. 
D)  what is given up to acquire it. 
A)  greater during periods of rising prices. 
B)  equal to the money cost. 
C)  less during periods of falling prices. 
D)  what is given up to acquire it.

Question 18

Economists pay special attention to making choices at the margin.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

The economic way of thinking has to do with:

Accepted Answer

A)  analyzing benefits but not costs. 
B)  analyzing costs but not benefits. 
C)  making choices at the margin. 
D)  making the distinction between microeconomics and macroeconomics. 
A)  analyzing benefits but not costs. 
B)  analyzing costs but not benefits. 
C)  making choices at the margin. 
D)  making the distinction between microeconomics and macroeconomics.

A theory that has won virtually universal acceptance is a:

The problem of determining what goods and services society should produce:

The economic way of thinking includes:

Explain the following statement: "In economics there are few absolute solutions. Almost all problem solutions require tradeoffs."

The study of how people choose among the alternatives available to them is the:

According to the textbook, economics is a:

A proposition about the relationship between two variables that can be proven false is called:

Reaching the incorrect conclusion that one event causes another because the events tend to occur together is called:

An example of a positive statement is:

A scarce resource is one that:

The incorrect presumption that because two events tend to occur together, one must cause the other is the:

The Case in Point on the Simpsons indicated that even fictional characters face:

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

A free good is one that can be acquired without sacrifice.

Economic models are:

All choices have monetary costs.

The opportunity cost of something is:

Economists pay special attention to making choices at the margin.

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

The economic way of thinking has to do with:

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 theory that has won virtually universal acceptance is a:

The problem of determining what goods and services society should produce:

The economic way of thinking includes:

Explain the following statement: "In economics there are few absolute solutions. Almost all problem solutions require tradeoffs."

The study of how people choose among the alternatives available to them is the:

According to the textbook, economics is a:

A proposition about the relationship between two variables that can be proven false is called:

Reaching the incorrect conclusion that one event causes another because the events tend to occur together is called:

An example of a positive statement is:

A scarce resource is one that:

The incorrect presumption that because two events tend to occur together, one must cause the other is the:

The Case in Point on the Simpsons indicated that even fictional characters face:

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

A free good is one that can be acquired without sacrifice.

Economic models are:

All choices have monetary costs.

The opportunity cost of something is:

Economists pay special attention to making choices at the margin.

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

The economic way of thinking has to do with:

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